Dear Debt Adviser,
I have a bad debt for a repossession. The original creditor sued for a judgment and won. Since the judgment was issued, the bad debt has been sold numerous times. Is the judgment still valid for the new owner of the debt?
You are asking the wrong question. The right question is this: How do I pay this thing off so I can get on with my life?
After the length of time that it took to go from a payment default to a repossession, then to a court action, and now to having the debt resold more than once, I would hope you have concluded that this dog isn't going anywhere until you feed it.
A judgment is awarded to a creditor by a court. It verifies and states the amount owed and the owner of the debt. It also sets the creditor up to request other collection actions from the court. Probable actions might include garnishment of wages, levying of a bank account or a lien on real property. The judgment is awarded for a particular debt, owed by a particular person. Therefore, it remains valid even if the debt is sold to another entity.
A big reason to get this behind you as soon as possible is that the debt is still growing. Depending on state law, interest and fees can be added onto the judgment balance. The fees I'm talking about aren't just your garden-variety bank or credit card late fees. They include the expenses involved in collection attempts and reasonable attorney fees. I'm sure you have an idea of what a reasonable attorney gets.
So if at all possible, I recommend that you get in touch with the collector and work out a plan to pay what you owe. Do it before the collector finds you. If you don't know who owns the debt, go to AnnualCreditReport.com and check your credit reports for free. The debt owner should be listed.
My experience is that you will eventually be found and it will be at the worst possible time. For example, you could swipe your debit card for an important purchase or when you are out with a love interest and find that it is denied. Why? Because your bank account has been levied and all your money is gone. Or, you may be expecting a promotion at work but instead receive notice from your employer that your paycheck will be garnished by 25 percent of your disposable earnings (after taxes and qualifying deductions).
Neither of the above scenarios would be good for your financial health. And you might be able to avoid them if you contact the collector with a solution to pay what you owe in a timely manner. I suggest you take a look at your finances and determine what you could pay monthly, or as a lump sum payment. Ideally, you will be able to pay what you owe in 24 months or less, or at least 50 percent of the total amount in a lump sum.
Paying your debt will not only avert unpleasant collection processes -- you will also have taken the first step to re-establishing your credit. A paid judgment is still not good for your credit. But it is much better than an unpaid one.
If you simply cannot afford to pay the repossession debt, I recommend you see an attorney and explore your legal options. Bankruptcy should be your last resort. It will damage your credit for years to come and affect your ability to find a good job, get insurance or obtain new credit. However, it will protect your income and keep possible collection activity from further damaging your finances.
Life is too short to spend it dodging bill collectors. It's time to put this behind you and move on to better things.
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